Netflix Ditches Qwikster Split

The best policy in business is to avoid making dumb decisions. But the second best policy is to be smart enough to realize when you’ve made a dumb decision and change your mind.

That’s certainly the case with Netflix, which has completely abandoned a rebranding and reorganization process that had some particularly bizarre and counterproductive facets.

The story dates back to July when Netflix decided it was no longer able and/or willing to carry on its $9.99 a month unlimited-DVDs-and-streaming program. Instead it decided customers could choose either DVDs or streaming for $7.99 a month, or stump up the price to $15.99 to keep both.

The online reaction was surprisingly hostile, to the point that Netflix chief Reed Hastings later apologized for the handling of the changes, noting that “many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes… In hindsight, I slid into arrogance based upon past success.”

Hastings immediately followed the apology by announcing an overhaul of the service: the DVD side would now be rebranded as Qwikster, with the addition of video game rentals. What quickly caught the attention of customers was that Qwikster and Netflix would be totally separate: users on the $15.99 deal would not only have two sets of charges, but they’d have to maintain two separate queues. Meanwhile rating a streamed movie would have no effect on suggestions for DVDs, and vice versa.

Writing on another site at the time, I cynically concluded ” Look forward to Hasting’s next apology in a couple of months…” It’s actually taken just three weeks for the about-face.

This time Hastings isn’t screwing about trying to justify anything, and just comes straight to the point: ” It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs. This means no change: one website, one account, one password… in other words, no Qwikster.”

Certainly it’s true that a moment’s thought from the perspective of a customer should have killed the Qwikster separation idea the moment it was conceived. And certainly even a token piece of market research should have seen it rejected. But hey, let’s be generous and at least acknowledge that Hastings didn’t let pride get in the way and has got it right in the end.

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